RBI asks Kotak Bank promoters to cut stake to 10%

The Reserve Bank of India has asked the promoters of Kotak Mahindra Bank to cut their stake in the bank to 10 per cent from 45 per cent by 2016.

This regulatory directive is in keeping with the guidelines for entry of new private sector banks. The guidelines require promoters to gradually bring down their stake to 10 per cent.

Promoter holding in Kotak Mahindra Bank was at 45.40 per cent as on December-end 2011 against 63 per cent in 2003, when it became a bank.

Promoters of private sector banks such as Kotak Mahindra bank, YES Bank and Development Credit Bank have been getting regulatory exemptions every year to hold higher stakes.

A Kotak Bank spokesperson said: “We would like to confirm that the long-term objective of the bank is to broad base the shareholding in a non-disruptive manner, keeping in mind the interests of all stakeholders…..The bank continues to be committed to following the statutory directions of the RBI.”

The Kotak Mahindra Bank stock closed lower at Rs 550.40 a share on the BSE, against the previous close of Rs 557.

kram@thehindu.co.in